Pound’s plunge ‘biggest shock’ of past year, says Avon boss

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The owner of global beauty giant Avon has said the pound’s fall in the wake of turmoil in the mini-budget market was the biggest blow to the group last year as he compared sterling sales to the Turkish lira crisis.

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Avon International’s global chief executive Angela Cretu told the PA news agency that sterling’s dramatic decline has caused challenges for the group, which reports in US dollars.

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She said the volatility of the pound would be reflected in its figures, although she insisted that the group was well hedged against currency fluctuations.

She said: “The pound is going down – that was the biggest surprise.

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“I thought the UK was the least of our concerns,” she said, having previously faced currency issues in her other global markets, including Turkey, which suffered a recession in the Turkish lira in 2021.

“I would never have thought that… I’m talking about the pound like I do the Turkish lira.”

The group — which is owned by Brazilian beauty conglomerate Natura — reports its third-quarter figures on November 11 as it prepares for the crucial Christmas season.

Ms Cretu said the group had caused massive cost escalation by cutting costs by US$100 million (£90.2 million) by saving across the group, separating layers of management and overhauling its systems to protect prices. has answered.

She told the PA: “Before the cost pressures passed… we had to organize our house – we got lean and focused and removed the layers of management.”

Given signs that beauty shoppers across the region are trading below high-end brands, Avon hopes to tap into the demands of more cost-conscious consumers with its affordable options.

Avon, through its five million representative strong army, has begun to recover face-to-face sales as global markets emerge from the pandemic.

But it has also experienced a lasting shift toward digital sales and representatives using social media to tap into a new generation of Avon customers.

This is a wealth sharing model and we are proud of it

The group also recently changed its commission system to offer incentives with commissions ranging from 15% to 40% for loyal representatives and its biggest sellers.

“It is a wealth-sharing model and we are proud of it,” said Ms. Cretu.

She urged other businesses to follow suit and “come together, along with governments, to redistribute wealth.”

Avon is hoping that its model, which includes zero start-up costs for delegates, can provide a lifeline for women struggling to make ends meet in a living crises.

“We are on their side and working how we can help them earn,” she said.

The group is supporting representatives in Ukraine by resuming operations there after stopping shortly after the Russian invasion.

It is distributing products into the country through its Polish distribution chain and demand is so solid that sales in Ukraine are now about 80% of what they saw before the war.

“Orders are coming from the front lines,” Ms Cretu said. “It’s an opportunity for (Ukrainian women) to work.”

Credit: www.standard.co.uk /

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